Portugal gets high marks from some of the go-to experts on retirement abroad. In fact, Live and Invest Overseas has consistently has rated the country’s Algarve region as one of the top retirement destinations in the world since 2013. International Living listed the country among the top 10 nations in which to retire in 2019. Would-be retirees are attracted by the climate, the scenery, the culture, and history as well as the country’s favorable tax plans, excellent infrastructure and one of its biggest draws – its low cost of living.

Once you’ve decided that Portugal may be the place for you to retire, you’ll want to explore which part of the country would be best. Do you want to be in a place with lots of expats like the Algarve region, which has a climate much like southern California? Or in the north in a university town? Or perhaps in the energetic capital city of Lisbon or in one of the beach towns on the Silver Coast, an easy train ride from the capital?

Here are four cities to consider.

(Note: Prices are converted from euros, at a rate of one euro to US$1.13 as of April 18, 2019.)

Lagos, the Algarve

The Algarve area in the very south of the country has been a favorite with the British for decades, both as a vacation and retirement destination. Greg Boegner, founder of the blog Portugal Confidential, says the Algarve is the best place for anyone “looking for a relaxed style of life and some of the best golf courses in the world. Each town along the coast has a community of expats who organize events and dinners. Culture is limited in this area, giving way to beach life.”

The author of the irreverent blog Piglet in Portugal has a few words of caution about making the Algarve your permanent home, however: “Taking a vacation for a few weeks a year is not the same as living in a tourist hotspot. For most people, it is a fun experience but for those who don’t embrace the holiday spirit, it can be hell on earth.”

Algarve's economy depends heavily on tourism.

Although the town of Lagos (pronounced lah-goosh) is a tourist center, there are many reasons why it's recommended. The town lies along the bank of the Rio Bensafrim and offers the undisputed charm of a 16th-century walled town with cobbled streets, whitewashed houses, and picturesque plazas. The town’s good and inexpensive restaurants, a range of fabulous nearby beaches, its spring-through-fall calendar of open-air jazz and classical concerts, and a vibrant nightlife all beckon.

The average rent for a one-bedroom apartment in the town's city center is as little as $675 a month, while the price to purchase an apartment is about $195 per square foot. That means a 500-square foot apartment can come for as little as $97,500.

Lisbon

Lisbon is the capital city, the main driver of the country’s economy. As you would expect, it’s a very cosmopolitan city. It has museums—including the Gulbenkian—a world-class orchestra, an English language theater group, as well as a number of bars and restaurants from which to choose.

Lonely Planet describes Lisbon as having “all the delights you’d expect of Portugal’s star attraction, yet with half the fuss of other European capitals. Gothic cathedrals, majestic monasteries, and quaint museums are all part of the colorful cityscape, but the real delights of discovery lie in wandering the narrow lanes of Lisbon’s lovely backstreets.”

Lisbon officially became Portugal's capital in 1255 because of its central location and harbor.

John Malkovich (yes, that John Malkovich) thinks Lisbon is perfect for retirement according to an interview he did with a website called Portugal is Paradise. The actor cited the people, who are “friendly, smiling and terrific,” plus the location, the geography, the architecture, the food and, of course, fado music. Fado is a uniquely Portuguese style of song popular in cafés and bars—all about destiny and the struggles and sadness of life and love.

In Lisbon, public transportation by bus and metro is plentiful and inexpensive, which means you won’t need to own a car. This will keep your monthly costs down significantly—gasoline and toll roads are a big expense in Portugal. A small apartment in Lisbon can be rented for about $980 while a meal in a mid-range restaurant is about $40 for two.

Many expats take advantage of the golden visa, which fast-tracks permanent residency and citizenship for expats.

For retirees with wanderlust, Lisbon is the perfect starting point for jaunts to other cities in Portugal, not to mention other locations in Europe and Africa. It’s a two-and-a-half-hour flight to Paris and just over one hour to Casablanca. And you’ll have your pick of bargain fares from the discounted European airlines that fly out of Lisbon airport.

Cascais

A 25-minute train ride from Lisbon, this coastal town (pronounces kush-kaish) is a favorite with expats. The city offers a free bike-share system, with a fleet of 1,200 bikes—all introduced in 2018. By registering on the app, you can take a spin between 8 a.m. and 8 p.m. and take in the coast.

There are three sandy bays—Praia da Conceição, Praia da Rainha and Praia da Ribeira—for retirees to soak up the sun, surf, or take a dip. There's also plenty to do for active people including rock climbing. You can also take advantage of the town's many restaurants and bars, or the shops and boutiques in the old quarter.

For the more sedentary, there is gardening, an avid bridge-playing set of folks and other interest groups. Living here, all of the great cities of Europe are at your doorstep. You can drive to Madrid, Seville or Barcelona in Spain. The south of France is a day’s drive away.”

Like most countries, Portugal has a progressive tax system, so the more you earn, the more tax you pay.

One expat, writing on Expat Exchange, calls Cascais IDEAL (the caps are hers). Why? “We have generally reliably nice weather, pristine beaches, restaurants everywhere on the narrow streets and squares as well as along the pedestrian esplanade by the ocean.” 

The cost to rent a one-bedroom apartment is slightly higher than Lisbon, coming in at $1137 a month.

Coimbra

Many people like the idea of retiring to a university town. Coimbra, in north-central Portugal, has been exactly that since the 1500s, when the university moved from Lisbon to its present location on the Mondego River.

“Two hours from Lisbon by train, Coimbra is Portugal’s version of Oxford,” according to International Living. “Students clad in black cloaks are a regular sight on the steep cobbled lanes running up to the grand university that dominates the town.”

Coimbra is one of the oldest universities in Europe, originally founded in 1290 and was the capital of Portugal in the 12th century. Now it has a population of about 106,000—almost a quarter of them university students. It is a town with a mix of the old and the new, from medieval churches and chill-out bars.

The climate in Coimbra is mild with winters ranging in the 40s. During the summer months, temperatures rarely get higher than the 80s.

The bar scene around the old cathedral is lively, and Café Santa Cruz, with its vaulted ceilings and stained glass windows, is a popular gathering place for poets, writers, and artists since 1929.

Many of the outdoor events in town are linked to the university such as the lively street parties on New Year’s Day. In June, the town hosts an international Jazz Festival, and every week during the summer months you can find a fado concert somewhere in town.

Looking to rent in Coimbra? A one-bedroom apartment in the city center averages $450 a month. That price drops to $330 per month if you move outside the downtown area. Dinner for two at a mid-range restaurant won't break the bank—it will only cost you $31.

Key Takeaways

  • Portugal is consistently considered one of the best places to retire because of its climate, culture, and favorable tax plans.
  • The average one-bedroom apartment in Portugal can range between $330 to $1137 per month, depending on where you live.
  • Public transportation in Lisbon is inexpensive, meaning you won't need a car, while Cascais offers a free bike-sharing program.

The Bottom Line

Finding the ideal retirement destination in Portugal requires two things – researching the cost of living in the place you’re considering and doing some honest-to-goodness soul-searching about what kind of retirement you want. Golf and living a beach-centric life? A big-city vibe? A cultural and learning center to call home? Keep in mind places that are perfectly dreamy for a two-week vacation may not be at all suited to a year-round life.

Use your social network to find others who have retired to Portugal and ask them every question you can think of. Then, when you’ve decided on a destination, spend at least a month in your chosen city or town and live like a local before putting down more permanent roots.